FTC Examines Apple’s In-App Purchases (For the Children)

The U.S. Federal Trade Commission said it would be reviewing in-app purchases Tuesday. In a written response to Massachusetts Representative Ed Markey (D), FTC Chairman Jon Leibowitz said that his agency will be looking at the mobile apps industry as a whole following a Washington Postarticle highlighting parents who found themselves with big bills from Apple after their kids made many and more in-app purchases in iOS games.

Rep. Markey said in a statement that, “After the Washington Post first broke this story earlier this month, I sent the Federal Trade Commission a letter calling on the agency to investigate the issue of ‘in-app’ purchases and provide additional information about the promotion and delivery of these applications to consumers, especially with respect to children.”

He added, “What may appear in these games to be virtual coins and prizes to children result in very real costs to parents. I am pleased that the FTC has responded, and as the use of mobile apps continues to increase, I will continue to actively monitor developments in this important area.”

The response (published byThe Post) Mr. Market referred to was the letter from FTC Chairman Jon Leibowitz, which said, “We fully share your concern that consumers, particularly children, are unlikely to understand the ramifications of these types of purchases. Let me assure you we will look closely at the current industry practice with respect to the marketing and delivery of these types of applications.”

By definition, Apple would not be the sole target of such a review, but the reality is that the company is the top dog by far in the mobile app space, and will therefore likely be the recipient of the closest — and highest profile — scrutiny.

Might I humbly suggest that parents not share their iTunes account’s password with their minor children and, for that matter, with their children period, just as they would hopefully not give their children permission to use their credit cards or permission to drive the family car. The iTunes account password is, after all, linked to one of their credit cards, and their children are, well, children.

Well, that will be easy enough for Apple to fix, probably by simply using a log-out button that lets you log-out without the fifteen minute delay.

Bill in Balt10:15 PM EST, Feb. 22nd, 2011Guest

As far as the Iphone goes, there is an option to not allow in-app purchases. This feature can be locked by a four digit self selected code further limiting in-app purchases.
If you are letting your children use your electronics then the parent should understand the gadget and it’s features first. Where is the account ability.

Bosco: You’ve finally identified a clear advantage of Android’s Market Place: It doesn’t work to sell apps, so one is safe from one’s kids running up large bill, though your children’s personal info will be lost to Google.

Perhaps, Google will expunge their data, once you notify them that your children are minors, but alas, once Google has passed their info on to marketers, which, I imagine, happens very quickly, there will be no getting it back.